SNP councillors predicting victory in 2017 fear winning control of the local authority could force them to carry a multi-million pound PFI “timebomb”.
Falkirk Council signed a PFI deal to build three secondary schools, a major high school extension and a special needs school for £65 million in 1998. Worth around £370 million over 25 years, it was the largest deal of its kind in the UK and classrooms opened two years later.
Despite the major public outlay, the facilities will not transfer into local authority hands when the contract ends in 2025 but will instead require the taxpayer to stump up more cash to secure the assets or extend the rental deal with private developer Class 98.
Although the administration is currently run by a coalition of Labour and the Tories, the council’s SNP group aims to regain control of the local authority in 2017.
However, the block fears it could be forced to inherit a budget crisis as it negotiates with Class 98 and is calling on the authority to tackle the issue now.
SNP leader Cecil Meiklejohn said: “Unlike every other PFI agreement throughout the country the assets – in this case four secondary schools in Falkirk – do not transfer ownership to the local authority at the end of the 25-year lease.
“Instead, they remain in private ownership with the only concession being the council being first in the queue to purchase these schools or negotiate another lease where the private owners hold all the aces.
“We are now approaching year 18 of a 25-year lease during which the council taxpayers will have paid around £370 million and at the end of this period not one single brick will be in the ownership of Falkirk Council.
“The contract signed by the then Labour administration with Class 98 was extremely bad for council taxpayers and the SNP at the time warned of the ticking timebomb this agreement is. Our concerns were ignored and the contract was carried after a division and therefore must be addressed.”
Despite facing a £45 million funding gap and preparing to make widespread cuts, the Labour–Tory administration is currently set to spend £21 million replacing its ageing headquarters.
Work is expected to be complete by 2018 and the council says this will save money in the long run.
However, SNP claims officials have already indicated that any overspend will push the project into deficit, putting further pressure on the budget.
Meiklejohn said: “Given the time it takes to bring forward a proposal to either purchase, lease or replace these schools this has to be the priority for the immediate future, not a new council headquarters. Education is too important a service to leave this huge uncertainty hanging over the future of half of Falkirk Council’s secondary schools.”
She added: “With the opinion polls showing a significant lead for the SNP and the formal pact between the Labour and the Conservative Party locally alienating traditional voters from both parties, a complete change of administration in 2017 is more than a possibility.
“My fear is that we will inherit a financial shambles of an authority that has committed to a vanity project and left the council’s education authority facing the biggest crisis in living memory.
“These are not the actions of a responsible administration and so we need to call a halt until there is a long-term strategy in place for major capital investment that gives the people’s [interest] priority rather than those of the Labour-Tory administration.”
Last night, a Falkirk Council spokesperson said: “The contract with Class 98 is not due to end until 2025.
“There is a mechanism in the contract that allows the council the option either to continue an arrangement with Class 98 Limited at the end of the 25 year period or to take over full ownership of the four schools and the school sites by making a final payment of £5 million, or the market value of the schools if this is less than £5 million, to Class 98.
“Robust exit arrangements were put in place with Class 98 at the time they were built and the HQ project will have no impact on them.”
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